MARKET CLOSE: NZ stocks rise; NZX gains

MARKET CLOSE: NZ stocks rise; NZX gains on share buy-back, dividend plan

By Jason Krupp

July 5 (BusinessDesk) – New Zealand stocks rose for a second day, after 11 straight declines, after China said it is committed to maintaining a steady growth rate. NZX Ltd., Pyne Gould Corp. and Steel & Tube Holdings lead gainers.

The NZX 50 Index rose 9.2 points, or 0.3%, to 2,947.3. Within the index 21 stocks rose, 19 fell and 10 were unchanged. Turnover was a lower-than-average $40.5 million, with trading subdued ahead of the Independence Day holiday in the U.S.

“Growth rates throughout Asia look that much higher than in Europe or the Americas, and it certainly does look to be a place that investors are looking at,” said Grant Williamson, director at Hamilton Hindin Greene. “Even with some speculation about China’s ability to maintain growth, they’re still looking at pretty impressive growth that we’d love to have.”

Williamson said investor focus this week be on the Australian market, with the U.S. effectively closed until Wednesday.

“The Australian market has been weighing on the New Zealand market for the past eight weeks now because of the super tax and the political changeover, and it certainly appears due for a bounce,” Williamson said.

Shares in NZX rose 6.9% to $1.56 as investors reacted to news of the bourse’s buy-back plan and their amended dividend policy. Williamson said NZX was “jumping at the first sign of good news.”

Pyne Gould rose 5.3% to 40 cents on news that the company’s cornerstone investor George Kerr has tapped sophisticated investors for a $150 million war chest to come out when banks are unwilling to open their credit lines.

Torchlight Investment Group, the vehicle that provided a $100 million facility to embattled financier South Canterbury Finance Ltd., will manage the fund, called the Torchlight Fund No.1 LP, which could rise by a further $20 million following reserved allocations.

Pike River Coal Ltd., the coal miner, rose 3.5% to 89 cents as investor appetite for coal stocks on the announcement that Banpu, Thailand’s biggest coal producer, had bought out the remaining stake in Centennial Coal Co. for A$2 billion. Williamson said the deal put a 40% premium on Centennial, which was creating interest in Pike.

Shares in Steel & Tube Holdings rose 5.1% to $2.26.

Pacing decliners, PGG Wrightson Ltd., the rural services company, fell 2.1% to 47 cents, and clothing retailer Pumpkin Patch fell 1.6% to $1.84.

Restaurant Brand New Zealand Ltd. fell 1.7% to $2.31, which Williamson said was due to profit taking by investors following the company’s announcement of better-than-expected profits last week.

New Zealand Oil & Gas Ltd., the energy exploration and production company, fell 0.8% to $1.23 on news that production from the Tui oilfield is forecast to tumble by 2 million barrels to 2.8 mmb's in the year ended June 30, 2011. Output would be cut by 300,000 barrels because of an extended shut-in at the Pateke-3H well, it said.

Auckland house sales slumped last month as winter malaise set in among buyers amid declining demand in the property market. The number of sales sank 16 percent to 665 in June from a month earlier, and was down 23 percent from a year ago, according to Barfoot & Thompson, Auckland's biggest real estate firm. The average sale price dropped 3.6 percent to $523,058 month-on-month, and was up an annual 0.2 percent.

UMR Research's Consumer Comfort Index showed kiwis are feeling more 'comfortable' about the economy and their own finances. The survey, taken last month, showed 48 percent of New Zealand's regard the economy as being good or excellent, up from 37 percent in April.

(BusinessDesk)

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